According to the data announced by Istanbul Chamber of Industry (ISO) and IHS Markit; Turkey’s manufacturing PMI has decreased below the threshold of 50 moderate decline in March and reached the level of 48.1, from February’s index value of 52.4. In a process in which global economies halt due to the coronavirus epidemic, we think that the incoming data does not fully reflect the current situation yet, and that the data after March will reflect a more visible recession effect.
As Turkey indicated the first coronavirus case on March 10, the lack of formal qualifications of the quarantine measures and the their implementation in the last two-week period in the month, are both effective on only a partial decline. In the first place, we expect April to reflect the effects of the virus more deeply, in terms of shutdowns until as earliest April 30. Again, as in the PMI outlook of Europe, China and the world, the manufacturing sector slowdown is more softly than the service. The service sector shows a sharper contraction due to travel restrictions and closings.
Although it is not clear how the growth momentum will be affected numerically in the current situation, the 1Q20 period will be high due to normal economic activity and strong growth in the first 2 months, while the quarterly contraction may be in question for the 2Q20 period and for the 3Q20 period depending on how long the crisis will continue. In terms of global economies, it can be predicted that 2020 will not be a growth year with current factors. Of course, the drawback in expectations arises from the fact that it is still unclear how long the crisis will continue.
Source: Tera Menkul
Hibya News Agency